Morning Notes – Monday April 24, 2017

/ April 24, 2017

Directional Bias For The Day:

  • The futures are sharply higher
  • Drifting lower since 6:00 AM high of 2376.75
  • Impact of French election
  • Gapped up at week’s open; gap is preserved
  • Odds are for an up day but range bound the U.S. session open; watch for break above 2376.75 and below 2366.75 for change of fortunes
  • No significant economic data to be release

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai closed down
  • European markets are higher
  • Dollar index and GBP/USD are down ; USD/JPY and EUR/USD are up
  • Commodities are mostly down – copper is up
  • 10-yrs yield is at 2.295% up from April 21 close of 2.237%; 30-years is at 2.938% down from 2.895%

Key Levels:

  • Critical support levels for S&P 500 are 2344.51, 2335.05 and 2329.13
  • Critical resistance levels for S&P 500 are 2361.37, 2378.36 and 2390.01
  • Key levels for eMini futures: break above 2375.25, the high of 8:00 AM and break below 2366.75, the low of 1:30 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +24.75, Dow by +207.00 and NASDAQ by +63.00
  • On Friday, at 4:00 PM, S&P future (June contract) closed at 2345.25 and the index closed at 2348.69 – a spread of about 3.50 points; futures closed at 2347.50 for the day; the fair value is -2.25

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • Candlestick for the last week, Friday April 21, was a  small green candle, a harami with open and close within the body of previous large red candle
  • An up week – second in in last five weeks; sixth in last ten weeks
  • Forming a small down-sloping flag; break above 2378.36 will be bullish
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 and second target of 2363.14 are achieved
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A red harami candle on Friday April 21, within a larger green candle of Thursday
  • Making a down sloping flag since making a the high of 2400.98 on March 1; a break above 2378.36 will be bullish; flag-pole high is 2400.98
  • Uptrend under pressure; break above April 5 high of 2378.36 is critical for uptrend
  • Broke below a descending triangle on March 21; target near 2308.00 still active;  rise above 2381.93 will nullify it
  • Move above an up-sloping channel since December 27 still relevant
  • Above 100-day, 200-day and 50-day SMA/EMA; at 20-day EMA
  • Last swing low 2263.62
  • Uptrend under pressure
2-Hour (e-mini future)
  • Gapped up following French election on Sunday 23; gap overcame a resistance – a series of highs in early April; facing next resistance of 2375.00, the high of 10:00 AM on April 5
  • Uptrend since 8:00 PM on April 16; higher highs and higher lows
  • Within a range since March 21 – high 2378.75 and the low of 2327.25
  • Above rising 50-bar EMA and 20-bar EMA
30-Minute (e-mini future)
  • Broke above an ascending triangle at 6:00 PM on Sunday April 23; triangle height is 33.75 points and the break out point is 235.50, giving a 100% extension target near 2390.00
  • The low of 6:00 PM open was not breached during the Asian and European sessions
  • High of 2376.75 was reached at 6:00 AM; high probability that it would act a as a resistance
  • Above rising 20-bar EMA and 50-bar EMA

Previous Session

Major U.S. indices closed down on Friday April 21. S&P 500 made a small red harami candle within a larger green candle of Thursday, when it faced a resistance at the down trend line from the March 1 high. Price action of Dow Jones Industrial Average was similar. NASDAQ is near the high and is making an ascending triangle. Russell 2000 is at the upper limit of a symmetrical triangle.

For the week, the major U.S. indices closed higher following a down previous week. S&P 500 gained +0.8%, DJA +0.5%, NASDAQ +1.8%, Russell 2000 +2.6% and Dow Jones Transportation Average +2.9%. On weekly timeframe, S&P 500 is making a small down-sloping flag. A break above 2378.36 will be bullish.

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